IslamicFinance.de

The Islamic Development Bank 's total funding portfolio for Egypt has reached US$12.5 billion, including US$3.1 billion in 2014, director country department Mohammad Al-Saati said. The IDB official has referred that his bank had signed financing agreements for important projects in Egypt, including US$450 million for South Helwan power station, US$460 million for Sharm El-Sheikh Airport, and US$220 million for Egyptian-Saudi electricity grid linkage project. Towards bolstering its partnership with Egypt, IDB will sign within the third quarter of this year a new agreement to launch a representative office in the North African country, Al-Saati noted.

The United Arab Emirates' bank industry association has discussed a proposal to create a centralised sharia board that would monitor Islamic banking. The central bank had proposed setting up a Higher Sharia Authority that would complement and oversee the work of sharia boards at individual Islamic banks. Details of the timing and structure of the new entity were not specified. The UAE Banks Federation, which represents 50 banks, also said on Sunday that it had approved the appointment of a new, independent monitoring agency that would help to implement its code of conduct for member institutions. It did not give details.

King Salman has reorganized his cabinet, removed princes from government roles, merged ministries and realigned succession since ascending to the throne in January. As a consequence, Saudi companies have yet to market a single security in 2015, making it the country’s quietest start for Islamic sales in nine year. The companies need some stability before they start looking at sukuk-type issuance. Saudi Arabia is pursuing a $130 billion spending plan to diversify its economy away from oil, and has vowed to invest in major infrastructure projects. King Salman’s changes will impact many areas, especially financial markets.

One serious complaint against the prevalent model of Islamic banking is that interest is being charged in the garb of service fee. In fact loans from Islamic banks are much costlier than those from conventional financial institutions, particularly public sector banks. Thus, one issue that must engage us is that if Islamic banking is a viable alternative for us, how can we justify the collapse of so many Islamic financial institutions in India in recent times. The real problem is that we are not prepared for a reasoned debate. Confusion continues to prevail with sharp division of opinion. The spate of failures of Islamic banks in India have caused untold suffering to small depositors. There is no alternative except to transact with conventional banks.

MCB Arif Habib Savings and Investments Limited ("MCBAH") has announced that it has appointed a Shariah Supervisory Board under the Chairmanship of former Justice Mufti Muhammad Taqi Usmani for their existing as well as future Shaiah Compliant Mutual Funds, Voluntary Pension Schemes (VPS), Administrative Plans and Shariah Compliant Investment Advisory Mandates. Other members of the Shariah Supervisory Board are Dr Muhammad Zubair Usmani and Dr Ejaz Ahmed Samdani. Apart from advising MCBAH on Shariah matters, the Shariah Board will give expert guidance in introducing and implementing new investment models and products based on international Shariah research.

Not only is Islamic finance gaining broader recognition in financial markets, it's also becoming a viable "alternative" source of funding to address pressing developmental challenges, eliminate extreme poverty and boost shared prosperity in developing and emerging economies. Islamic finance can make significant contributions to economic development, given its direct link to physical assets and the real economy. Moreover, by expanding the range and reach of financial products, Islamic finance could help improve financial access and foster the inclusion of those who are now deprived of financial services. Islamic finance also helps strengthen financial stability. However, the industry will also need to address several challenges.

With expanding economies and hundreds of million Muslims, Africa deserves to be a bigger part of Islamic finance. After a slow start, there are signs the sector is beginning to gain the crucial mass and legislative backing it needs. Senegal's CFAFr 100 billion ($200 million) debut last June was Africa's biggest,ever sovereign sukuk, attracting both local and international buyers. South Africa followed in September with a $500 million 5.75-year deal that was only the third-ever sukuk issued by a non-Muslim majority country. Those in the industry argue that Africa's new-found visibility as a market for Islamic finance is long overdue.

Big-time criminals engaging in major financial crimes that effectively involve the theft of billions of dollars from the public aren’t being prosecuted. Today we learned of yet another huge settlement by five of the largest banks operating in our country. The list includes JPMorgan Chase, Citigroup, Barclays, the Royal Bank of Scotland UBS. Each of these banks admitted to engaging in criminal activity. But banks don’t commit crimes. People working for banks commit crime. And when people working for banks commit crime, it’s the responsibility of our Justice Department to indict them.

The recent IMF paper, Rethinking Financial Deepening: Stability and Growth in Emerging Markets, is focused on the impact of financial development on growth in emerging markets, but its authors clearly viewed the findings as germane to advanced economies. Their conclusion was that the growth benefits of financial deepening were positive only up to a certain point, and after that point, increased depth became a drag. But what is most surprising about the IMF paper is that the growth benefit of more complex and extensive banking systems topped out at a comparatively low level of size and sophistication.

The expanding reach of Islamic finance promises to carry a number of potential benefits. For example, Islamic financial institutions are less exposed to crisis because of their risk-sharing features. Another advantage is that Islamic finance can attract a large number of people into the banking system who have previously refrained for religious reasons. But while growing in scope, there are challenges for the industry to develop in a safe and sound manner. The IMF examined some of these issues in a recently published Staff Discussion Note, trying to understand under what circumstances the potential of Islamic Finance can be realized.

The Governor of the National Bank of Kazakhstan, H.E. Kairat Kelimbetov, launched the Islamic Financial Services Industry (IFSI) Stability Report 2015 during the Opening Session of the 12th Islamic Financial Services Board (IFSB) Summit on 20 May in Almaty, Kazakhstan. In essence, the IFSI Stability Report 2015 discusses the following topics: An overview of the IFSI as well as updates on trends and developments in the three sectors of the industry; Initiatives undertaken by international standard-setting bodies; Surveillance framework for the global financial system including identification of the gaps; Emerging issues in Islamic finance. The IFSI Stability Report 2015 aims to contribute to a wider cross-border engagement on stability issues in Islamic finance.

Demand for Malaysian Islamic real-estate investment trusts may withstand a sluggish property market as their steady rental income is popular with pension funds amid a shortage of Shariah-compliant assets. Johor Corp plans to list the RM900 million (S$333 million) Al-Salam REIT, Kamaruzzaman Abu Kassim, the company's president said. The prospectus will be registered by July and the trust expects to deliver returns of around 6.3 per cent in 2016, he said. Al-'Aqar Healthcare REIT, majority owned by Johor Corp, returned 11.7 sen a unit to shareholders. That worked out to a dividend yield of 8.4 per cent based on its year-end closing price.

The Islamic Financial Services Board (IFSB) and INCEIF - The Global University of Islamic Finance have renewed an agreement to facilitate international cooperation between the two organisations to provide relevant activities relating to capacity building and awareness promotion in Islamic finance. This mutual co-operation aims to strengthen the efforts in promoting an exchange of information, undertaking research, development, training and education in the Islamic financial services industry. Under the first MoU, signed in 2012, the IFSB and INCEIF held a series of six Executive Forums (EF). he next Executive Forum on Islamic Finance, themed Building Momentum for Islamic Liquidity Management will be held on 3 - 4 June 2015 in Kuala Lumpur, Malaysia.

The Association for Development of Islamic Finance (ADIF) announced the signing of memorandum on cooperation with Shariyah Review Bureau (SRB). ADIF solely supported by National Bank of Republic of Kazakhstan (NBRK), is responsible for promoting, enhancing and maintaining the Islamic financial sector and cooperation with investors from GCC and South East Asia. The agreement was signed at the 12th IFSB Summit which took place in Almaty, Kazakhstan. Speaking at the Summit, Chairman of the Presidium, Zaratkazy Nurpiisov said, given the magnitude of Muslim population, enormous oil reserves, rich minerals and metal explorations the country has considerable advantages for Islamic finance.

With a relative paucity of attractively priced assets available to long-term investors, European institutional investors are diverting their focus and resources to alternative assets, according to Mercer’s 2015 European Asset Allocation survey. The findings also show that the use of passive management of equity and bond holdings increased, suggesting that European investors increasingly prefer to seek returns from manager skill within alternative and unconstrained mandates, while harvesting cheap beta in core equity and bond portfolios. Mercer’s survey also found an increased focus on environmental, social, and governance (ESG) factors within the investment process amongst participating funds.

QIB-UK is providing opportunities for customers interested to invest in the London real estate market starting with providing access to properties, both residential and commercial ones. A team of real estate specialists will ensure that customers, being continuously supported by QIB Private Banking Relationship Managers stationed in Doha, are able to achieve optimal return on their investments. Recently, QIB added Knight Frank, a global property adviser company established in London back in 1896 to its partners. Customers can now visit QIB’s website to find specific property listings, along with information on locations and prices. They can then submit an online request form indicating properties of their interest to be contacted by the QIB-UK real estate team.

Thomson Reuters published the findings of its Global Islamic Asset Management Outlook at the World Islamic Funds Conference in Bahrain. According to the study, Islamic funds are a US$60 billion industry forecasted to grow to at least US$77 billion by 2019, while the latent demand for Islamic funds is projected to grow to US$185 billion. There are substantial growth opportunities but the industry will struggle to reach its potential in the near- to mid-term to bridge the US$108 billion demand-supply gap. Outside of core markets Malaysia and Saudi Arabia, there are other growth pockets on the horizon for Islamic funds. Pakistan and Indonesia currently enjoy stable political climates; China is also opening up to Shariah-compliant funds.

Islamic mutual funds are growing again after a slump that lasted years, but the sector still falls short of meeting demand for sharia-compliant investment products, a study by Thomson Reuters and its subsidiary Lipper showed. Many firms pulled out of the sector around 2008 because of the global financial crisis and as sliding equity markets reduced investor interest. Islamic mutual funds globally now hold $53.2 billion of assets under management, recovering from a low of $25.7 billion in 2008, the study found. The total number of Islamic mutual funds reached 943 in 2014, up from 828 a year earlier. Further growth is expected, with the study projecting the funds will grow 8 percent annually to reach $76.7 billion by 2019.

Nasdaq Dubai said on Monday Ajman Bank has begun transacting on the its Murabaha Platform, which facilitates the provision of streamlined Sharia-compliant financing services. Ajman Bank’s initial activity on the platform has enabled it to meet the needs of customers throughout the country, the bourse said in a statement. Since it was officially launched in April 2014, the Nasdaq Dubai Murabaha platform has completed a total of more than Dh46.5 billion of transactions and is playing a growing role in Dubai’s expansion as the global capital of the Islamic Economy.

Kuwait Finance House may auction some of its properties or offer them to be run by other operators, depending on market conditions, its chief executive Mazin Saad al-Nahedh without giving details. He also said KFH planned to cut tens of jobs as part of its restructuring plan, which would eliminate some positions. Some people would be moved to other subsidiaries. KFH said in early May that it was considering a possible sale of its Malaysian unit. That is the only unit earmarked for possible sale because it is outside the Middle East, Nahedh said. The bank is restructuring activities ahead of a planned divestment by its largest shareholder, the Kuwait Investment Authority. A timetable for the divestment has not been announced.